EXHIBIT 10.43
TERM LOAN AGREEMENT
Dated as of August 23, 0000
Xxxxxxx
X&X XX XXX XXXXX, X.X.X.
AS BORROWER,
THE XXXXX & WOLLENSKY RESTAURANT GROUP, INC.
AS GUARANTOR
and
XXXXXX XXXXXXX XXXX XXXXXX
COMMERCIAL FINANCIAL SERVICES, INC.
AS LENDER
BASIC LOAN TERMS
[LIBOR RATE]
Loan Amount: $4,000,000 (the "FIRST ADVANCE"), subject to the Borrower's
right to obtain a second advance of up to an additional
$10,000,000 (the "TERM LOAN BALANCE ADVANCE") on the terms
and conditions for the Term Loan Balance Advance set forth
in a commitment letter dated July 1, 2002 (the "COMMITMENT
LETTER"). Prior to the funding of the Term Loan Balance
Advance, references in this Agreement to the "Loan" are
deemed to be references to the First Advance only. Upon
funding of the Term Loan Balance Advance, references to the
Loan will be deemed to be references to the entire, fully
funded "Term Loan" defined in the Commitment Letter. The
terms and conditions of the Commitment Letter which pertain
to the funding of the Term Loan Balance Advance are deemed
to be incorporated by reference in this Agreement, and (as
incorporated herein) shall survive the funding of the First
Advance.
Use of Proceeds: The proceeds of the First Advance shall be available (and
the Borrower agrees that it shall use such proceeds or
cause such proceeds to be used) solely for lawful corporate
purposes, and no proceeds of the Loan will be used to
purchase or carry any such margin stock or to extend credit
to others for the purpose of purchasing or carrying any
such margin stock.
Facility Fee: The Borrower has or will pay to the Lender, on or before
the date of the First Advance, a facility fee in the amount
of $105,000.
Unused Availability
Fee: The Borrower will pay to the Lender at the end of each
three month period after the date hereof, and on the Final
Draw Date (as defined in the Commitment Letter) an unused
availability fee based on an annual rate of 1.50% applied
to the maximum amount of the Term Loan Balance Advance.
Interest Rate: As set forth in the Promissory Note (evidencing the First
Advance) of even date herewith (the "NOTE").
Late Charge; Default
Rate of Interest: As provided in the Note.
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Optional
Prepayments: As provided in the Note.
Payments and
Computations: The Borrower hereby irrevocably authorizes Xxxxxx Xxxxxxx
XX (hereinafter defined) from time to time to pay to the
Lender on behalf of the Borrower any amount due hereunder
or under the Note by application of funds from any Free
Credit Balance (hereinafter defined) existing at such time
or from redemption or other disposition of any MS
BusinesScape Funds (hereinafter defined) or under the Note
in the Borrower's MS BusinesScape Account (hereinafter
defined); and the Borrower hereby authorizes Xxxxxx Xxxxxxx
XX from time to time to redeem or otherwise dispose of such
MS BusinesScape Funds for the purpose of obtaining funds to
make such payment. The Borrower agrees to deposit or
otherwise make available to the Borrower's MS BusinesScape
Account for the account of the Lender on the day when due,
the amount necessary for the purpose of making payment of
any amount due hereunder or under the Note.
The Borrower shall make each payment under the Note in
respect of interest on, principal of, or other amount
related to the Loan, not later than 12:00 noon (New York
City time) on the day when due in United States Dollars
(hereinafter defined) in same day funds, with payments
being so received by the Lender after such time being
deemed to have been made on the next succeeding Business
Day (hereinafter defined).
All computations of interest under the Note shall be made
by the Lender on the basis of a year of 365 or 366 days, as
the case may be, in each case for the actual number of days
(including the first day but excluding the last day)
occurring in the period for which such interest is payable.
Each determination by the Lender of an interest rate under
the Note shall be conclusive and binding for all purposes,
absent manifest error. Whenever any payment hereunder or
under the Note shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall
in such case be included in the computation of payment of
interest.
Notices, Etc.: All notices and other communications provided for hereunder
shall be in writing (including fax communication and any
other method of communication authorized by the Lender) and
mailed, faxed, or otherwise sent or delivered, if to the
Borrower or the Guarantor, at its address at c/o The Xxxxx
& Wollensky Restaurant Group, Inc., 0000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or fax number
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(000) 000-0000, Attention: Xxxx X. Xxxxxx, CFO; if to the
Lender, at its address at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, or fax number (000) 000-0000, Attention:
Director of Credit; or, as to the Borrower or the Lender at
such other address or fax number as shall be designated by
such party in a written notice to the other party. All such
notices and communications shall, when mailed, faxed, or
otherwise sent or delivered, be effective when deposited in
the mails, faxed, or otherwise sent or delivered,
respectively, except that notices and communications to the
Lender pursuant to Article II shall not be effective until
received by the Lender. Delivery by fax of an executed
counterpart of any amendment or waiver of any provision of
this Agreement or of any schedule or exhibit hereto to be
executed and delivered hereunder shall be effective as
delivery of an original executed counterpart thereof.
The foregoing Basic Loan Terms are incorporated into and made a part of this
Term Loan Agreement.
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TERM LOAN AGREEMENT
TERM LOAN AGREEMENT, dated as of August 23, 2002 between S&W OF LAS VEGAS,
L.L.C., a Delaware limited liability company (the "BORROWER"), The Xxxxx &
Wollensky Restaurant Group, Inc., a Delaware corporation (the "Guarantor"), and
XXXXXX XXXXXXX XXXX XXXXXX COMMERCIAL FINANCIAL SERVICES, INC., a Delaware
corporation (the "LENDER").
PRELIMINARY STATEMENTS:
(1) The Borrower and the Guarantor have requested that the Lender make the
First Advance to the Borrower.
(2) The Lender has agreed to make the First Advance to the Borrower on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, based on the foregoing premises and in consideration of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS, BASIC LOAN AND ACCOUNTING TERMS
Section 1.01 CERTAIN DEFINED TERMS. In addition to the terms defined
elsewhere in this Agreement, the terms used herein shall have the meanings given
thereto in Schedule I annexed hereto and incorporated by reference herein.
Section 1.02 BASIC LOAN TERMS, SCHEDULES AND EXHIBITS. The Basic Loan Terms
and all exhibits and schedules referred to herein are incorporated herein by
reference as though set forth herein in full.
Section 1.03 ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Paragraph (a) of Schedule II ("GAAP").
ARTICLE II
THE LOAN
Section 2.01 THE LOAN. The Lender agrees, on the terms and conditions
hereinafter set forth, to make the First Advance to the Borrower on the
Effective Date hereof as described in the Basic Loan Terms. As provided in the
Basic Loan Terms, the funding of the Term Loan Balance Advance is subject to the
terms and conditions therefor set forth in the Commitment Letter. If the Term
Loan Balance Advance is made, the parties hereto will enter into an amendment to
this Agreement as contemplated by the Commitment Letter. Any amount borrowed
under this Agreement and repaid or prepaid may not be reborrowed.
Section 2.02 MAKING THE FIRST ADVANCE. The obligation of the Lender to make
the First
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Advance is subject to fulfillment of the conditions set forth in Article III
hereof. Upon fulfillment of the conditions set forth in Article III, the First
Advance will be funded.
Section 2.03 TERMS OF LOAN AND REPAYMENT. The Loan shall bear interest and
be repaid in accordance with the terms and conditions set forth in the Note.
Section 2.04 TAXES. The Borrower shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or from the execution,
delivery or registration or recording of, performing under, or otherwise with
respect to, this Agreement, the Note, the Deed of Trust, or any other Loan
Document.
Section 2.05 EVIDENCE OF DEBT. The Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the indebtedness of the
Borrower to the Lender resulting from the Loan from time to time, including the
amounts of principal and interest payable and paid to the Lender from time to
time under the Note. Entries made in good faith by the Lender in such account or
accounts shall be prima facie evidence of the amount of principal and interest
due and payable or to become due and payable from the Borrower to the Lender
under this Agreement, absent manifest error; provided, however, that the failure
of the Lender to make an entry, or any finding that an entry is incorrect, in
such account or accounts shall not limit or otherwise affect the obligations of
the Borrower under the Note, this Agreement or any other Loan Document.
ARTICLE III
CONDITIONS OF LENDING
Section 3.01 CONDITIONS PRECEDENT TO FIRST ADVANCE. The Lender shall make
the First Advance on and as of the first date (the "EFFECTIVE DATE") on which
all of the following conditions precedent have been satisfied:
(a) Each of the Borrower and the Guarantor shall have established the
MS BusinesScape Account.
(b) The Borrower shall have paid the facility fee payable pursuant to
the Basic Loan Terms, as well as the other payment items set forth on the
Closing Agenda.
(c) The Lender shall have received on or before the date of the First
Advance the documents listed on the Closing Agenda in form and substance
satisfactory to the Lender.
(d) The following statements shall be true (and the acceptance by the
Borrower of the proceeds of the First Advance shall constitute a representation
and warranty by the Borrower that on the date of the First Advance such
statements are true):
(i) the representations and warranties of the Borrower and the
Guarantor contained in Section 4.01 hereof and in each other Loan Document
are correct on and as of the date of the First Advance, before and after
giving effect to the First Advance and to the application of the proceeds
therefrom, as though made on and as of such date, and
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(ii) no event has occurred and is continuing, or would result
from the First Advance or from the application of the proceeds therefrom,
that constitutes a Default.
(e) The Lender shall have received such other approvals, opinions and
documents as the Lender may reasonably request.
Upon satisfaction of such conditions, the Borrower hereby authorizes the Lender
to insert the Effective Date (of this Agreement) on page 1 hereof, whereupon the
First Advance shall be made available to the Borrower in accordance with the
terms and conditions hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 REPRESENTATIONS AND WARRANTIES OF THE BORROWER. Each of the
Borrower and the Guarantor represents and warrants as follows:
(a) The Borrower and the Guarantor (i) are each duly organized,
validly existing and in good standing under the laws of the State of Delaware,
(ii) are each duly qualified and in good standing as a foreign limited liability
company or corporation (as applicable) in each other jurisdiction (including
Nevada, in the case of the Borrower) in which it owns or leases property or in
which the conduct of its business requires it to so qualify, except where the
failure to so qualify would not be reasonably likely to have a Material Adverse
Effect, and (iii) has all requisite limited liability company or corporate power
(as applicable) and authority (including, without limitation, all governmental
licenses, agreements and other approvals) to own and lease and operate its
respective properties and to carry on its respective business as now conducted
and as proposed to be conducted.
(b) The execution, delivery and performance by the Borrower and
Guarantor of the Loan Documents to which each of them is a party are within
their respective limited liability company or corporate powers, have been duly
authorized by all necessary limited liability company or corporate action (as
applicable), and do not contravene (i) the Borrower's or the Guarantor's
charter, by-laws or limited liability company agreement (as applicable), (ii)
any law or any contractual restriction binding on or affecting the Borrower or
the Guarantor, (iii) result in the breach of, or constitute a default or require
any payment to be made under, any loan agreement, credit agreement, indenture,
mortgage, deed of trust, bond, note, lease or other instrument or agreement
binding on or affecting the Borrower, the Guarantor or any of their properties,
or (iv) except for the Liens created under the Loan Documents, result in or
require the creation or imposition of any Lien upon or with respect to any of
the properties of the Borrower or the Guarantor.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other third
party is required for (i) the due execution, delivery and performance by the
Borrower or the Guarantor of the Loan Documents to which either of them is a
party, or (ii) the grant by the Borrower of the Liens granted by it pursuant to
the Collateral Documents to which it is a party.
(d) The Loan Documents to which the Borrower or the Guarantor is a
party have been duly executed and delivered by the Borrower and the Guarantor,
and are the legal, valid and
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binding obligations of the Borrower and the Guarantor enforceable against the
Borrower and the Guarantor in accordance with their respective terms.
(e) There is no pending or threatened action or other proceeding
affecting the Borrower or the Guarantor before any court, governmental agency or
arbitrator that (i) could be reasonably likely to have a Material Adverse
Effect, or (ii) purports to affect the legality, validity or enforceability of
this Agreement, the Note, the Deed of Trust or any other Loan Document to which
the Borrower or the Guarantor is a party, or the consummation of the
transactions contemplated hereby or thereby, and there has been no adverse
change in the status, or financial effect on the Borrower or the Guarantor from
the date of the financial statements, if any, delivered to the Lender.
(f) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock, as defined in Regulation
U issued by the Board of Governors of the Federal Reserve System, and no
proceeds of the Loan will be used to purchase or carry any such margin stock or
to extend credit to others for the purpose of purchasing or carrying any such
margin stock.
(g) The Guarantor owns all of the issued and outstanding membership
interests in the Borrower, and is the sole manager of the Borrower. The Borrower
has no Subsidiaries.
(h) The Trust Property is in compliance with all applicable zoning
laws including, without limitation, those in respect of parking and set-back
requirements.
ARTICLE V
COVENANTS OF THE BORROWER
Section 5.01 AFFIRMATIVE COVENANTS. So long as any portion of the Loan
shall remain unpaid, the Borrower (and, where specifically indicated, the
Guarantor) will:
(a) COMPLIANCE WITH LAWS, ETC. Comply with all applicable laws, rules,
regulations and orders, such compliance to include, without limitation,
compliance with ERISA. Any violations against the Trust Property existing on the
date hereof, including, without limitation, fire department violations, shall be
remedied and discharged of record by the earlier of (i) sixty (60) days after
the date hereof or (ii) the date required by law.
(b) PAYMENT OF TAXES, ETC. Pay and discharge, before the same shall
become delinquent, (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property subject to the right to contest as set
forth in the Deed of Trust and (ii) all lawful claims that, if unpaid, might by
law become a Lien upon its property.
(c) MAINTENANCE OF INSURANCE. Maintain insurance as required under the
Deed of Trust and the Security Agreement, and otherwise with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower
operates. Each of the Borrower and the Guarantor shall maintain insurance
coverage which complies with the workers' compensation and employees' liability
laws of all states in which the Borrower and the Guarantor shall be required to
maintain such insurance.
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(d) PRESERVATION OF CORPORATE OR LIMITED LIABILITY COMPANY EXISTENCE,
ETC. Preserve and maintain, the Borrower's limited liability company existence
and the Guarantor's corporate existence, as well as their respective rights
(charter and statutory) and franchises.
(e) VISITATION RIGHTS. At any reasonable time and from time to time,
upon reasonable notice during normal business hours, permit the Lender or any
agents or representatives thereof, to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of, the
Borrower and the Guarantor and to discuss the affairs, finances and accounts of
the Borrower and the Guarantor with any of their officers or directors and with
their independent certified public accountants.
(f) KEEPING OF BOOKS. In the case of both the Borrower and the
Guarantor, keep proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and business
of the Borrower and the Guarantor in accordance with GAAP.
(g) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, all of the
Borrower's properties that are used or useful in the conduct of its business (i)
as required under the Deed of Trust with respect to the Trust Property, (ii) as
required under the Security Agreement, where applicable, and (iii) otherwise in
good working order and condition, ordinary wear and tear excepted.
(h) TRANSACTIONS WITH AFFILIATES. Conduct business otherwise permitted
under the Loan Documents with any of the Borrower's Affiliates on terms that are
fair and reasonable and no less favorable to the Borrower than it would obtain
in a comparable arm's-length transaction with a Person not an Affiliate.
(i) REPORTING REQUIREMENTS. In the case of both the Borrower and the
Guarantor, furnish to the Lender all financial statements, reports, documents
and other information at the times and in accordance with the requirements set
forth in Paragraph (b) of Schedule II.
(j) MAINTENANCE OF MS BUSINESSCAPE ACCOUNT. In the case of both the
Borrower and the Guarantor, maintain the MS BusinesScape Account.
(k) FURTHER ASSURANCES. In the case of both the Borrower and the
Guarantor, promptly upon request by the Lender, do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, conveyances, pledge agreements, mortgages, deeds of
trust, trust deeds, assignments, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments as the Lender may reasonably require from time
to time in order to (i) carry out more effectively the purposes of the Loan
Documents, (ii) to the fullest extent permitted by applicable law, subject the
Borrower's properties, assets, rights or interests to the Liens now or hereafter
intended to be covered by any of the Collateral Documents, (iii) perfect and
maintain the validity, effectiveness and priority of any of the Collateral
Documents and any of the Liens intended to be created thereunder and (iv)
assure, convey, grant, assign, transfer, preserve, protect and confirm more
effectively unto the Lender the rights granted or now or hereafter intended to
be granted to the Lender under any Loan Document or under any other instrument
executed in connection with any Loan Document to which the Borrower or the
Guarantor is or is to be a party.
(l) SUBORDINATION OF BORROWER OBLIGATIONS. At the request of the
Lender, all
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obligations of the Borrower to the Guarantor will be subordinated to the
obligations of the Borrower to the Lender under the Loan Documents, which
subordination shall be pursuant to documentation in form and substance
satisfactory to the Lender.
(m) INTEREST RATE SWAP. If the Borrower and the Lender (or an
Affiliate) agree to enter into an interest rate swap agreement (the "Swap") with
respect to the Loan, the Borrower and the Guarantor agree that the Loan
Documents will be amended so that the exposure under the Swap (as determined by
the Lender in its discretion) will be secured by the Deed of Trust and the other
existing collateral for the Loan. If the Lender so agrees to enter into the
Swap, the Lender shall receive additional title insurance coverage insuring the
Lender that the exposure under the Swap is secured by the Deed of Trust to the
same extent and with the same priority as the Deed of Trust on the date hereof
and otherwise pursuant to a title policy (or endorsement) in form and substance
satisfactory to the Lender. The Borrower shall pay all costs and expenses
associated with the Swap including, without limitation, title premiums and fees
and the Lender's legal fees.
(n) In the case of both the Borrower and the Guarantor, preserve,
protect, renew and keep in full force and effect its rights, licenses, permits,
patents, trademarks, trade names and franchises, including, without limitation,
the rights granted under the License Agreement (as hereinafter defined) and the
Sublicense Agreement (as hereinafter defined), and shall not amend, restate or
terminate such agreements without the Lender's consent.
Section 5.02 NEGATIVE COVENANTS. So long as any portion of the Loan shall
remain unpaid, the Borrower will not:
(a) LIENS, ETC. Create or suffer to exist, any Lien on or with respect
to any of its properties, whether now owned or hereafter acquired, other than as
set forth in Paragraph (c) of Schedule II.
(b) MERGERS, ETC. Merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets to, any Person.
(c) DEBT. Create, incur, assume or suffer to exist any Debt other than
as set forth in Paragraph (d) of Schedule II.
(d) CHANGE IN NATURE OF BUSINESS, MANAGEMENT OR OWNERSHIP. Make any
material change in the nature of its business as carried on at the date hereof,
in the identity of the manager of the Borrower (under its limited liability
company agreement), or in the composition of the current executive management of
the Borrower or in its equity ownership, or operate the restaurant at the Trust
Property under any name other than "Xxxxx & Wollensky".
(e) SALES, ETC., OF ASSETS. Sell, lease, transfer or otherwise dispose
of any assets, or grant any option or other right to purchase, lease or
otherwise acquire any assets other than (i) assets to be sold in the ordinary
course of business and (ii) assets to be sold or disposed of in the ordinary
course of business which are no longer necessary or required in the conduct of
its business. The forgoing exceptions (i) and (ii) are subject to compliance
with the applicable Collateral Documents.
(f) INVESTMENTS IN OTHER PERSONS. Make or hold any Investment in any
Person.
(g) RESTRICTED PAYMENTS. Declare or pay any dividends, purchase,
redeem, retire,
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defease or otherwise acquire for value any of its membership interests now or
hereafter outstanding, return any capital to its members (or the equivalent
Persons thereof) as such, make any distribution of assets, membership interests,
obligations or securities to its members (or the equivalent Persons thereof) as
such, or issue or sell any membership interests.
(h) LEASE OBLIGATIONS. Create, incur, assume or suffer to exist any
obligations as lessee other than as set forth in Paragraph (e) of Schedule II.
(i) FEE OWNERSHIP OF PROPERTY. Acquire, or permit the Guarantor or any
Affiliate to acquire, fee ownership of the property leased under the Subject
Lease (and the improvements and equipment thereon) unless simultaneously with
such acquisition, the Lender obtains a first priority fee Deed of Trust
encumbering such property, improvements and equipment in form and substance
satisfactory to the Lender.
Section 5.03 FINANCIAL COVENANTS. So long as any portion of the Loan shall
remain unpaid, the Borrower will comply with the covenants set forth in
Paragraph (f) of Schedule II.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 EVENTS OF DEFAULT. If any of the following events ("EVENTS OF
DEFAULT") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of or interest on the
Loan when the same becomes due and payable; or the Borrower shall fail to make
any other payment of fees or other amounts payable under this Agreement or the
Note when the same becomes due and payable; or
(b) Any representation or warranty made by the Borrower or the
Guarantor (or by any of their respective officers or members) herein or in any
other Loan Document, or in connection with this Agreement or any other Loan
Document, shall prove to have been incorrect or misleading in any material
respect when made or as of the date of the Loan; or
(c) (i) The Borrower or the Guarantor (as applicable) shall fail to
perform or observe any term, covenant or agreement contained in Xxxxxxx 0.00(x),
(x), (x), (x), (x), (x), (x), (x), (x), (x) or (n), 5.02, 5.03, 6.01(j) or
6.01(k); or (ii) the Borrower or the Guarantor (as applicable) shall fail to
perform or observe any other term, covenant or agreement contained in this
Agreement on its part to be performed or observed if such failure described in
this subsection (c)(ii) shall remain unremedied for 10 business days after the
earlier of (x) the time the Borrower or the Guarantor (as applicable) becomes
aware or should have reasonably become aware of such failure, or (y) notice from
the Lender; or (iii) the Guarantor shall at any time cease to own all of the
membership interests in the Borrower; or (iv) an "Event of Default" (as defined
therein, where applicable) or a default beyond applicable periods of notice and
grace, if any, shall occur under a Loan Document other than this Agreement; or
(d) (i) The Borrower or the Guarantor shall fail to pay any principal
of or premium or interest on any Debt (other than the Debt outstanding
hereunder) of the Borrower or the Guarantor (as the case may be), when the same
becomes due and payable (whether by
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scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Debt; or (ii) any other event
shall occur or condition shall exist under any agreement or instrument relating
to any such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Debt; or any such Debt shall be declared to be due and payable, or required
to be prepaid or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each case prior
to the stated maturity thereof. The provisions of clause (i) of this
subparagraph (d) shall apply to (x) any Debt of the Borrower or the Guarantor to
the Lender or any of its Affiliates in any amount, and (y) any Debt to any other
creditor for borrowed money in excess of $100,000 with respect to the Borrower,
and $1,000,000 with respect to the Guarantor, unless the Lender determines, in
its reasonable judgment, that the default to such other creditor is subject to a
bona fide dispute; or
(e) Either the Borrower or the Guarantor shall voluntarily dissolve,
liquidate or terminate operations, or shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Borrower or the Guarantor
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in the case of
any such proceeding instituted against it (but not instituted by it), either (A)
such proceeding shall remain undismissed or unstayed for a period of 10 days, or
(B) any of the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or for any substantial part
of its property) shall occur; or the Borrower or the Guarantor shall take any
action to authorize any of the actions set forth above in this subsection (e);
or
(f) Any judgment or order for the payment of money in excess of
$100,000 shall be rendered against the Borrower or in excess of $200,000 shall
be rendered against the Guarantor and either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or order or (ii) there
shall be any period of ten (10) consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(g) The Borrower, the Guarantor or any of the Borrower's ERISA
Affiliates shall incur one or more of the following: (i) the occurrence of any
ERISA Event; (ii) the partial or complete withdrawal of the Borrower or any of
the Borrower's ERISA Affiliates from a Multiemployer Plan; or (iii) the
reorganization or termination of a Multiemployer Plan; or
(h) Any Lien granted pursuant to any Collateral Document shall for
any reason cease to be a valid and perfected first priority lien on and security
interest in the Collateral purported to be covered thereby; or
(i) (i) The Guaranty or the Environmental Guaranty shall for any
reason cease to
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be a valid and binding obligation or enforceable against the Guarantor (or the
Borrower, in the case of the Environmental Guaranty), or (ii) the Guarantor
shall repudiate, revoke or deny any liability under the Guaranty or the
Environmental Guaranty (or the Borrower shall do the same with respect to the
Environmental Guaranty); or
(j) A default beyond any applicable notice and/or grace period shall
have occurred under the Sale and License Agreement (the "License Agreement")
dated August 16, 1996 between St. Xxxxx Associates and The New York Restaurant
Group, LLC or the Sublicense Agreement (the "Sublicense Agreement") of even date
herewith between the Guarantor and the Borrower; or
(k) A Change in Control with respect to the Guarantor shall have
occurred;
then, and in any such event, the Lender may, by notice to the Borrower and the
Guarantor, declare the Loan, all interest thereon and all other amounts payable
under this Agreement to be forthwith due and payable, whereupon the Loan, all
such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; PROVIDED, HOWEVER, that
upon the occurrence of any event described in subsection (e) above, the Loan,
all such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower and the Guarantor.
ARTICLE VII
MISCELLANEOUS
Section 7.01 AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Borrower or the Guarantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Lender, the Borrower and the Guarantor, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
Section 7.02 NOTICES, ETC. All notices and other communications provided
for hereunder shall be in writing (including fax communication and any other
method of communication authorized by the Lender) and mailed, faxed, or
otherwise sent or delivered as described in the Basic Loan Terms.
Section 7.03 NO WAIVER; REMEDIES. No failure on the part of the Lender to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 7.04 COSTS AND EXPENSES; INDEMNIFICATION.
(a) The Borrower and the Guarantor jointly and severally agree to pay
on demand all fees, costs and expenses of the Lender in connection with the
preparation, negotiation, execution, delivery, administration, modification and
amendment of the Commitment Letter, this Agreement, the Note, the Collateral
Documents and the other Loan Documents, including,
12
without limitation, search, filing and recording fees and taxes, costs of
reappraisals required by the Lender and the reasonable fees and expenses of
counsel for the Lender with respect thereto, and with respect to advising the
Lender as to its rights and responsibilities under such documents. The Borrower
and the Guarantor further jointly and severally agree to pay on demand all fees,
costs and expenses of the Lender, if any (including, without limitation,
reasonable counsel fees and expenses), in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Agreement, the Note, the Collateral Documents and the other Loan Documents,
including, without limitation, reasonable fees and expenses of counsel for the
Lender in connection with the enforcement of rights under this Section 7.04(a).
Each of the Borrower and the Guarantor hereby authorizes the Lender and its
Affiliates at any time and from time to time, without notice to the Borrower or
the Guarantor, and whether or not the Lender shall have made any demand or an
Event of Default shall have occurred, to charge any account of the Borrower or
the Guarantor maintained by the Lender or its Affiliates against such fees,
costs and expenses. The rights of the Lender and its Affiliates under this
Section are in addition to other rights and remedies (including, without
limitation, rights of set-off) that the Lender and its Affiliates may have.
(b) The Borrower and the Guarantor agree to indemnify and hold
harmless the Lender and each of its Affiliates and officers, directors,
employees, agents and advisors (each, an "INDEMNIFIED PARTY") from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) this Agreement, any of the
transactions contemplated herein or the actual or proposed use of the proceeds
of the Loan except to the extent such claim, damage, loss, liability or expense
is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 7.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by the Borrower, its directors, equityholders or creditors
or an Indemnified Party or any other Person, whether or not any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. Each of the Borrower and the Guarantor also
agrees not to assert any claim against the Lender, any of its Affiliates, or any
of their directors, officers, employees, attorneys and agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to this Agreement, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loan.
(c) Without prejudice to the survival of any other agreement of the
Borrower or the Guarantor hereunder, the agreements and obligations of the
Borrower and the Guarantor contained in this Section 7.04 shall survive the
payment in full of principal, interest and all other amounts payable hereunder,
under the Note and the other Loan Documents.
Section 7.05 RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, the Lender and its Affiliates are hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to sell, liquidate, transfer or otherwise apply any assets or securities of
the Borrower or the Guarantor held by the Lender or any of its Affiliates
13
and set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by the Lender or such Affiliates to or for the credit or the account of the
Borrower or the Guarantor against any and all of the respective obligations of
the Borrower or the Guarantor now or hereafter existing under this Agreement,
the Note, the Guaranty or any other Loan Document, whether or not the Lender
shall have made any demand under this Agreement or such other Loan Document and
although such obligations may be unmatured. The rights of the Lender and its
Affiliates under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that the Lender and its
Affiliates may have.
Section 7.06 BINDING EFFECT; SUCCESSORS AND ASSIGNS. This Agreement shall
become effective on the Effective Date and thereafter shall be binding upon and
inure to the benefit of the Borrower, the Guarantor, the Lender and their
respective successors and assigns, except that neither the Borrower nor the
Guarantor shall have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lender.
Section 7.07 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
Section 7.08 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by fax
shall be effective as delivery of an original executed counterpart of this
Agreement.
Section 7.09 INTEREST RATE LIMITATION. Anything herein to the contrary
notwithstanding, if at any time the applicable interest rate, together with all
fees and charges that are treated as interest under applicable law
(collectively, the "CHARGES"), as provided for herein or in any other Loan
Document, or otherwise contracted for, charged, received, taken or reserved by
the Lender, shall exceed the maximum lawful rate (the "MAXIMUM RATE") that may
be contracted for, charged, taken, received or reserved by the Lender in
accordance with applicable law, the rate of interest payable on the Loan,
together with all Charges payable to the Lender, shall be limited to the Maximum
Rate. Neither the Borrower nor the Guarantor shall ever be liable for unearned
interest thereon or shall ever be required to pay interest thereon in excess of
the maximum amount that may be lawfully charged under applicable law from time
to time in effect, and the provisions of this Section 7.09 shall control over
all other provisions of the Loan Documents that may be in conflict. If (a) the
maturity of the obligations of the Borrower under Note or this Agreement is
accelerated for any reason, (b) any of such obligations are prepaid and as a
result any amounts held to constitute interest are determined to be in excess of
the legal maximum or (c) the Lender or any other holder of any or all of the
obligations of the Borrower under this Agreement shall otherwise collect moneys
that are determined to constitute interest that would otherwise increase the
interest on any or all of such obligations to an amount in excess of that
permitted to be charged by applicable law then in effect, then all such sums
determined to constitute interest in excess of such legal limit shall, without
penalty, be promptly applied to reduce the then outstanding principal of such
obligations or, at the Lender's or such holder's option, promptly returned to
the Borrower or the other payor thereof upon such determination.
14
Section 7.10 JURISDICTION, ETC.
(a) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any other Loan
Document, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such federal court.
Each of the parties hereto consents to the service of copies of any and all
process which may be served in any such action or proceeding by the mailing of
copies of such process to such party at its address specified in Section 7.02.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement or any other Loan Document shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document in the courts of any other jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any New York State or federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
Section 7.11 ASSIGNMENTS AND PARTICIPATIONS. The Lender may assign to one
or more Persons all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of the Loan owing to
it), without notice to, or the consent of the Borrower or the Guarantor. The
Lender may sell participations to one or more Persons (other than the Borrower
or any of its Affiliates) in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Loan owing to it). The Lender may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower and the Guarantor
furnished to the Lender by or on behalf of the Borrower or the Guarantor. In
addition, the terms of the Note relating to participations of the Note shall be
applicable to participations of the Lender's rights and obligations under this
Agreement. The Lender represents that as of the date hereof, it has no present
intention of assigning its rights and obligations under this Agreement
(including, without limitation, all or a portion of the Loan owing to it);
provided, however, the foregoing shall in no way impair or otherwise alter the
Lender's rights under this Section.
Section 7.12 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE GUARANTOR AND
THE LENDER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, THE
LOAN OR THE ACTIONS OF THE LENDER OR ANY OF ITS AFFILIATES IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF.
15
Section 7.13 SEVERABILITY OF PROVISIONS. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 7.14 HEADINGS. Article, section and paragraph headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part hereof for any other purpose.
Section 7.15 CONFLICTS. Conflicts between this Agreement and any of the
Collateral Documents shall be resolved in favor of the latter.
Section 7.16 LENDER ACTION. The Lender shall have the right, but not the
obligation, to take any action at the Borrower's expense if the Lender believes,
in its reasonable discretion after consultation with Borrower or Guarantor, that
such action is necessary to avoid the occurrence of a Material Adverse Effect
with respect to the Borrower or the Guarantor, including, without limitation,
curing any defaults under the License Agreement or the Sublicense Agreement.
[Balance of Page Intentionally Left Blank]
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
S&W OF LAS VEGAS, L.L.C.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chief Financial Officer
THE XXXXX & WOLLENSKY
RESTAURANT GROUP, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXXX XXXXXXX XXXX XXXXXX
COMMERCIAL FINANCIAL SERVICES,
INC.
By: /s/ Xxxxxxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxxxxxx Xxxxxxx
Title: Vice President
00
XXXXX XX XXX XXXX )
ss.:
COUNTY OF NEW YORK )
On the 19th day of August in the year 2002 before me, the undersigned,
a Notary Public in and for said State, personally appeared Xxxx X. Xxxxxx,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.
/s/ Xxxxx Xxxxxxxx
---------------------------------
Notary Public
[SEAL]
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the 19th day of August in the year 2002 before me, the undersigned,
a Notary Public in and for said State, personally appeared Xxxxxxxxxxx Xxxxxxx,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.
/s/ Xxxxx Xxxxxxxx
---------------------------------
Notary Public
[SEAL]
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the __ day of August in the year 2002 before me, the undersigned, a
Notary Public in and for said State, personally appeared ______________________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.
---------------------------------
Notary Public
18
SCHEDULE I
TO TERM LOAN AGREEMENT WITH
S&W OF LAS VEGAS, L.L.C. AND
THE XXXXX & WOLLENSKY RESTAURANT GROUP, INC.
CERTAIN DEFINED TERMS
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"AFFILIATE" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling", "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to vote 5% or more of the voting stock of such Person or
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting stock, by contract or otherwise.
"ASSIGNMENT OF LEASES" means the Absolute Assignment of Rents and Leases of
even date herewith made by the Borrower in favor of the Lender.
"BUSINESS DAY" means a day of the year on which banks are not required or
authorized by law to close in New York City.
"CHANGE IN CONTROL" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) of shares
representing more than 33-1/3% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Guarantor; or (b)
occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Guarantor by Persons who were neither (i) nominated by the
board of directors of the Guarantor nor (ii) appointed by directors so
nominated.
"CHARGES" has the meaning specified in Section 7.09.
"CLOSING AGENDA" means the Closing Agenda prepared by the Lender and
delivered to the Borrower setting forth the documents to be executed and/or
delivered by the parties in connection with this Agreement.
"COLLATERAL" means all "Collateral" referred to in the Collateral Documents
and all other property that is or is intended to be subject to any Lien in favor
of the Lender.
"COLLATERAL DOCUMENTS" means the Security Agreement, the Deed of Trust and
the Assignment of Leases.
"DEBT" of any Person means, without duplication, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property or
services (other than current trade payables incurred in the ordinary course of
business), (b) all obligations of such Person
Schedule I - Page 1
evidenced by notes, bonds, debentures or other similar instruments, (c) all
capital lease obligations of such Person, (d) all obligations of such Person,
contingent or otherwise, in respect of acceptances, letters of credits or
similar extensions of credit, (e) all liabilities secured by any Lien on any
property owned by such Person, even though such Person has not assumed or
otherwise become liable for the payment thereof, (f) all obligations of such
Person in respect of interest rate or currency protection agreements, and (g)
all Debt of others guaranteed directly or indirectly in any manner by such
Person.
"DEED OF TRUST" means a Leasehold Deed of Trust of even date herewith made
by the Borrower to the trustee thereunder for the benefit of the Lender and
encumbering the Trust Property.
"DEFAULT" means any Event of Default or any event that would constitute an
Event of Default but for the requirement that notice be given or time elapse or
both.
"EBIT" means net income (net loss), plus (a) interest expense and (b)
income tax expense.
"EBITDA" means net income (net loss), plus (a) interest expense, (b) income
tax expense, (c) depreciation expense and (d) amortization expense.
"EFFECTIVE DATE" has the meaning specified in Section 3.01.
"ENVIRONMENTAL GUARANTY" means the Joint and Several Hazardous Material
Guaranty and Indemnification Agreement of even date herewith made by the
Borrower and the Guarantor in favor of the Lender.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title IV of ERISA
is a member of the Borrower's controlled group, or under common control with the
Borrower, within the meaning of Section 414 of the Internal Revenue Code.
"ERISA EVENT" means (a) (i) the occurrence of a reportable event, within
the meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day
notice requirement with respect to such event has been waived by the PBGC, or
(ii) the requirements of subsection (1) of Section 4043(b) of ERISA (without
regard to subsection (2) of such Section) are met with respect to a contributing
sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event
described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA
is reasonably expected to occur with respect to such Plan within the following
30 days; (b) the application for a minimum funding waiver with respect to a
Plan; (c) the provision by the administrator of any Plan of a notice of intent
to terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to in Section 4041(e) of
ERISA); (d) the cessation of operations at a facility of the Borrower or any
ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e)
the withdrawal by the Borrower or any ERISA Affiliate from a Multiple Employer
Plan during a plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (f) the conditions for the imposition of a lien
under Section 302(f) of ERISA shall have been met with respect to any Plan; (g)
the adoption of an amendment to a Plan requiring the provision of
Schedule I - Page 2
security to such Plan pursuant to Section 307 of ERISA; or (h) the institution
by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of
ERISA, or the occurrence of any event or condition described in Section 4042 of
ERISA that constitutes grounds for the termination of, or the appointment of a
trustee to administer, a Plan.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"FREE CREDIT BALANCE" means the amount of any cash that may be withdrawn
from the Borrower's MS BusinesScape Account at any time without creating a
negative balance therein or giving rise to interest charges thereon.
"GAAP" has the meaning specified in Section 1.03.
"GUARANTY" means the Guaranty of Payment of even date herewith made by the
Guarantor in favor of the Lender in respect of the Loan.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.
"INVESTMENT" in any Person means any loan or advance to such Person, any
purchase or other acquisition of any capital stock or Debt or the assets
comprising a division or business unit for a substantial part or all of the
business of such Person, any capital contribution to such Person or any other
direct or indirect investment in such Person, including, without limitation, any
acquisition by way of a merger or consolidation.
"LIEN" means any lien, security interest or other charge or encumbrance of
any kind, or any other type of preferential arrangement having the effect of a
lien or security interest, including, without limitation, the lien or retained
security title of a conditional vendor and any easement, right of way or other
encumbrance on title to real property.
"LOAN DOCUMENTS" means this Agreement, the Note, the Collateral Documents,
the Guaranty, the Environmental Guaranty and any other documents executed and/or
delivered by the Borrower or the Guarantor in connection therewith, in each case
as amended, supplemented or otherwise modified from time to time.
"MATERIAL ADVERSE CHANGE" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or the Guarantor or the Borrower, or the
Guarantor and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or the Guarantor, or the Borrower or the
Guarantor and its Subsidiaries taken as a whole, (b) the rights and remedies of
the Lender under this Agreement or (c) the ability of the Borrower or the
Guarantor to perform its obligations under any Loan Document to which it is a
party.
"MAXIMUM RATE" has the meaning specified in Section 7.09.
"XXXXXX XXXXXXX XX" means Xxxxxx Xxxxxxx XX Inc., a Delaware corporation,
or any successor thereof.
"MS BUSINESSCAPE ACCOUNT" means, in respect of the Borrower, the MS
BusinesScape Account for Business maintained by the Borrower at Xxxxxx Xxxxxxx
XX, MS BusinesScape
Schedule I - Page 3
Account No. 000-000000-000, and in respect of the Guarantor, the MS BusinesScape
Account for Business maintained by the Guarantor at Xxxxxx Xxxxxxx XX, MS
BusinesScape Account No. 000-000000-000.
"MS BUSINESSCAPE ACCOUNT AGREEMENT" means the respective agreements entered
into between the Borrower and Xxxxxx Xxxxxxx XX or the Guarantor and Xxxxxx
Xxxxxxx XX governing the applicable MS BusinesScape Account.
"MS BUSINESSCAPE FUNDS" means any of the money market fund shares credited
to the Borrower's MS BusinesScape Account.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower, the Guarantor or any ERISA Affiliate and at least one Person other
than the Borrower, the Guarantor and the ERISA Affiliates or (b) was so
maintained and in respect of which the Borrower, the Guarantor or any ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in the event
such plan has been or were to be terminated.
"NOTE" means the Promissory Note of even date herewith in the principal
amount of $4,000,000.00 made by the Borrower in favor of the Lender.
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor).
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
"SECURITY AGREEMENT" means the Security Agreement of even date herewith
made by the Borrower to the Lender.
"SINGLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower, the Guarantor or any ERISA Affiliate and no Person other than the
Borrower, the Guarantor and the ERISA Affiliates or (b) was so maintained and in
respect of which the Borrower, the Guarantor or any ERISA Affiliate could have
liability under Section 4069 of ERISA in the event such plan has been or were to
be terminated.
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding voting stock of such corporation, (b)
the interest in the capital or profits of such limited liability company,
partnership or joint venture or (c) the beneficial interest in such trust or
estate is at the time directly or indirectly owned or controlled by such Person,
by such Person and one or more of its other Subsidiaries or by one or more of
such Person's other Subsidiaries.
"TRUST PROPERTY" has the meaning given to such term in the Deed of Trust.
Schedule I - Page 4
SCHEDULE II
TO TERM LOAN AGREEMENT WITH
S&W OF LAS VEGAS, L.L.C. AND
THE XXXXX & WOLLENSKY RESTAURANT GROUP, INC.
FINANCIAL REPRESENTATIONS, COVENANTS AND REPORTING
(a) REPRESENTATION. The Borrower represents and warrants that the
management prepared unaudited statements of operations for the periods ended
December, 1999, December 2000, December 2001 and June 30, 2002, copies of which
have been furnished to the Lender, fairly present the financial condition of the
Borrower as at such dates, all in accordance with GAAP consistently applied. The
Guarantor represents and warrants that (i) the 10-K statement for the fiscal
year ended 2001, (ii) the 10-Q statement for the fiscal quarter ended March 31,
2002 and fairly present the financial condition of the Guarantor as at such
dates, all in accordance with GAAP consistently applied. The Guarantor
represents and warrants that the management prepared break-down of results for
each individual restaurant operated by the Guarantor and each of its
Subsidiaries for the periods ended January 3, 2000, January 1, 2001 and December
31, 2001, copies of which have been furnished to the Lender, are true and
complete in all material respects as at such dates. Since the date of such
statements, there has been no Material Adverse Change.
(b) REPORTING REQUIREMENTS. So long as any portion of the Loan shall remain
unpaid, the Borrower and the Guarantor (as applicable) will furnish to the
Lender:
(i) For the Guarantor: as soon as available and in any event within 45 days
after the end of each quarter of each fiscal year of the Guarantor,
consolidated management prepared (10-Q) financial statements of the
Guarantor and its Subsidiaries as of the end of such quarter, duly
certified by the chief financial officer of the Guarantor as having been
prepared in accordance with GAAP, together with a certificate of the chief
financial officer of the Guarantor setting forth in reasonable detail the
calculations necessary to demonstrate compliance with Paragraph (f) (ii) of
this Schedule II;
(ii) For the Borrower: as soon as available and in any event within 45 days
after the end of each quarter of each fiscal year of the Borrower,
management prepared financial statements of the Borrower as of the end of
such quarter, duly certified by the managing member of the Borrower as
having been prepared in accordance with GAAP, together with a certificate
of the managing member of the Borrower setting forth in reasonable detail
the calculations necessary to demonstrate compliance with Paragraph (f)
(i), (iii) and (iv) of this Schedule II;
(iii) For the Guarantor: as soon as available and in any event within 90
days after the end of each fiscal year of the Guarantor, a copy of the
annual audited financial statements for such year for the Guarantor and its
Subsidiaries (including the Borrower), containing a consolidated balance
sheet of the Guarantor and its Subsidiaries as of the end of such fiscal
year and a consolidated statement of income and cash flows of the Guarantor
and its Subsidiaries for such fiscal year, in each case accompanied by an
opinion acceptable to the Lender and an accountant letter, if issued, by
independent public accountants
Schedule II - Page 1
acceptable to the Lender, together with a certificate of the chief
certified financial officer of the Guarantor setting forth in reasonable
detail the calculations necessary to demonstrate compliance with Paragraph
(f) (ii) of this Schedule II;
(iv) For the Borrower: as soon as available and in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the annual
reviewed financial statements for such year for the Borrower, containing a
balance sheet of the Borrower as of the end of such fiscal year and a
statement of income and cash flows of the Borrower for such fiscal year, in
each case accompanied by an opinion acceptable to the Lender and an
accountant letter, if issued, by independent certified public accountants
acceptable to the Lender, together with a certificate of the managing
member of the Borrower setting forth in reasonable detail the calculations
necessary to demonstrate compliance with Paragraph (f) (i), (iii) and (iv)
of this Schedule II;
(v) For the Borrower: not later than 90 days after the end of each fiscal
year of the Borrower, a detailed rent roll for the Trust Property in form
satisfactory to the Lender;
(vi) as soon as possible and in any event within five days after the
occurrence of each Default continuing on the date of such statement, a
statement of the managing member of the Borrower or the chief financial
officer of the Guarantor setting forth details of such Default and the
action that the Borrower or the Guarantor has taken and proposes to take
with respect thereto;
(vii) together with the filing of each 10-K and 10-Q statement with the
Securities and Exchange Commission, a management prepared break-down of
results for each individual restaurant operated by the Guarantor or any of
its Subsidiaries duly certified by the chief financial officer of the
Guarantor as being true and complete; and
(viii) such other information respecting the Borrower or the Guarantor or
any of its Subsidiaries as the Lender may from time to time reasonably
request.
(c) LIENS, ETC. So long as any portion of the Loan shall remain unpaid, the
Borrower will not create or suffer to exist, any Lien on or with respect to any
of its properties, whether now owned or hereafter acquired, or assign any right
to receive income, other than: (i) Liens created or expressly permitted under
the Loan Documents, (ii) purchase money Liens upon or in any real property or
equipment acquired (or leased) or held by the Borrower in the ordinary course of
business to secure the purchase price of such property or equipment or to secure
Debt incurred solely for the purpose of financing the acquisition (or lease) of
such property or equipment, or Liens existing on such property or equipment at
the time of its acquisition or extensions, renewals or replacements of any of
the foregoing for the same or a lesser amount, PROVIDED, HOWEVER, that no such
Lien shall extend to or cover any properties of any character other than the
real property or equipment being acquired, and no such extension, renewal or
replacement shall extend to or cover any properties not theretofore subject to
the Lien being extended, renewed or replaced, provided further that the
aggregate principal amount of the indebtedness secured by the Liens referred to
in this clause (ii) shall not exceed the amount specified therefor in Paragraph
(d) of this Schedule II at any time outstanding, and (iii) the Liens existing on
the Effective Date and described on Schedule 5.02(a) hereto.
(d) DEBT. So long as any portion of the Loan shall remain unpaid, the
Borrower will not
Schedule II - Page 2
create, incur, assume or suffer to exist, any Debt other than: (i) Debt existing
on the Effective Date and described on Schedule 5.02(c) hereto, (ii) Debt
secured by Liens permitted by Paragraph (c)(ii) of this Schedule II aggregating
not more than $100,000.00 at any one time outstanding, (iii) Debt under the Loan
Documents, and (iv) unsecured Debt incurred in the ordinary course of business
aggregating not more than $200,000.00 at any one time outstanding.
(e) LEASE OBLIGATIONS. So long as any portion of the Loan shall remain
unpaid, the Borrower will not create, incur, assume or suffer to exist, any
obligations as lessee (i) for the rental or hire of real or personal property in
connection with any sale and leaseback transaction, or (ii) except for the
Subject Lease (as defined in the Deed of Trust) and except for equipment leases
made in the ordinary course of business, for the rental or hire of other real or
personal property of any kind under leases or agreements to lease having an
original term of one year or more.
(f) FINANCIAL COVENANTS. So long as any portion of the Loan shall remain
unpaid, the Borrower and the Guarantor (as indicated below) shall comply with
the following:
(i) DEBT SERVICE COVERAGE RATIO. The Borrower shall not permit the ratio of
EBITDA excluding rent received from tenants, minus maintenance capital
expenditures, minus real estate taxes, to interest expense plus current
portion of long-term debt, to be less than 1.50 to 1.00 (measured on a
rolling four quarter basis) as of the close of any fiscal quarter;
provided, however, the amount of any "balloon" payment due at the maturity
of the Note shall not be included for the purposes of the calculation of
Debt Service Coverage Ratio.
(ii) MINIMUM LIQUIDITY. The Guarantor shall maintain a minimum liquidity of
$5,000,000 (free and clear of all Liens) or more as of the close of each
fiscal quarter ending after the date hereof through (and including) the
sooner of (x) June 30, 2003 or (y) the close of the first fiscal quarter
prior to September 30, 2003 provided that at the time of the close of the
first fiscal quarter prior to September 30, 2003, the Guarantor is in
compliance with the covenants set forth in (iii) below (Senior Leverage
Ratio) and (iv) below (Interest Coverage Ratio).
(iii) SENIOR LEVERAGE RATIO. Subject to (v) below, the Guarantor shall not
permit the ratio of total unsubordinated funded debt to EBITDA to exceed
3.00 to 1.00 (measured on a rolling four quarter basis) as of the close of
any fiscal quarter. Any purchase money mortgage debt incurred by a
subsidiary (other than the Borrower) of the Guarantor which is not
guaranteed by the Guarantor or the Borrower shall not be deemed to be a
part of unsubordinated funded debt of the Guarantor for the purposes of the
calculation of Senior Leverage Ratio
(iv) INTEREST COVERAGE RATIO. Subject to (v) below, the Guarantor shall not
permit the ratio of EBIT to interest expense to be less than 2.0 to 1.0
(measured on a rolling four quarter basis) as of the close of any fiscal
quarter.
(v) LOAN REPAYMENT. Prior to the end of each calendar month, the Guarantor
shall repay any loans owing to the Borrower to the extent required for the
Borrower to make all payments then due and payable under the Note and the
other Loan Documents.
(vi) GENERAL. The Guarantor shall not be required to be in compliance with
the covenant
Schedule II - Page 3
set forth in (iii) above (Senior Leverage Ratio) or the covenant set forth
in (iv) above (Interest Coverage Ratio) until September 30, 2003, provided
that it maintains compliance with the covenant set forth in (ii) above
(Minimum Liquidity). However, in all events, the Guarantor will be required
to be in compliance with the covenant set forth in (iii) above (Senior
Leverage Ratio) and the covenant set forth in (iv) above (Interest Coverage
Ratio) by not later than the sooner of (x) September 30, 2003 or (y) the
close of the first fiscal quarter following the fiscal quarter I which the
Guarantor first complied with the covenants set forth in (iii) above
(Senior Leverage Ratio) and (iv) above (Interest Coverage Ratio). All
calculations of EBITDA and EBIT will exclude from the determination of
earnings, (a) amounts attributable to pre-opening expenses associated with
new restaurants, which expenses are approved by the Lender in its
reasonable discretion and (b) operating losses (up to $150,000.00 per new
restaurant) incurred by a new restaurant during the first full month after
the opening of such new restaurant. The negative (financial) covenants of
the Guarantor will be determined on the basis of the consolidated results
reflected on the Guarantor's financial statements. Accounting terms which
are not otherwise defined shall have the meanings ascribed to them under
GAAP.
Schedule II - Page 4
SCHEDULE 5.02(a)
TO TERM LOAN AGREEMENT WITH S&W OF LAS VEGAS, L.L.C. AND
THE XXXXX & WOLLENSKY RESTAURANT GROUP, INC.
EXISTING LIENS
None.
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Schedule 5.02(a) - Page 1
SCHEDULE 5.02(c)
TO TERM LOAN AGREEMENT WITH S&W OF LAS VEGAS, L.L.C. AND
THE XXXXX & WOLLENSKY RESTAURANT GROUP, INC.
EXISTING DEBT
None.
{40057719:3}
Schedule 5.02(c) - Page 1
